Nvidia bounce shows Wall Street's AI obsession is far from over

Results from Nvidia, one of the world's most valuable firms, are considered a bellwether for the AI market as its chips power most of the major data centers and advanced AI models globally. Companies including Microsoft MSFT.O and Meta Platforms META.O — two of Nvidia's biggest customers — have recently reinforced expectations that Big Tech would spend more than $730 billion on AI infrastructure this year, an unprecedented sum that marks a big step up from last year's $400 billion outlay.

Nvidia has been one of the most dependable performers in Silicon Valley in recent years and the signature stock of the AI-driven bull market that began nearly four years ago. Nvidia shares have soared some 1,700% in that time as the semiconductor giant became the world's largest company by market value.

This year, though, its stock performance has been eclipsed by other chip companies which are expected to benefit from the massive buildout of AI data centers, while investors are increasingly anxious about the implications of the actions many large firms are taking to finance the buildout. Nvidia shares are up more than 12% year-to-date, trailing an over 60% rise for the Philadelphia SE Semiconductor index .SOX, but Nvidia remains a bellwether for the AI trade.